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Factors Affecting the Survival of SMEs: A Study of Biotechnology Firms in South Korea

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  • Kwangsoo Shin

    (Graduate School of Health Science Business Convergence, College of Medicine, Chungbuk National University, 1 Chungdae-ro, Seowin-gu, Cheongju-si 28644, Korea)

  • Gunno Park

    (Technology Strategy and Planning Team, Samsung SDS, SDS West Campus 22F, 125, Olympic-ro 35, Songpa-gu, Seoul 05510, Korea)

  • Jae Young Choi

    (Graduate School of Technology & Innovation Management, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 133-791, Korea)

  • Minkyung Choy

    (Management Research Center, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea)

Abstract

Past studies examining survival factors of biotechnology firms have focused on pioneer countries, such as the USA, the UK and Germany. However, as the biotechnology industry in Asia is reaching the take-off stage and showing a high growth rate, the research on survival factors in the context of Asian latecomers is needed. The present research investigates internal and external factors affecting the survival of SMEs (Small and Medium-sized Enterprises) in the biotechnology industry in South Korea. The Cox hazard model was employed to perform a robust estimation in survival analysis. The analysis of internal factors showed that the origin of a firm (i.e., having prior experience or spin-offs) and the business sub-sector (i.e., platform-based) affect the hazard rates of biotechnology firms. In terms of external factors, unlike strategic alliances, government R&D funding lowered hazard rates for the firm’s survival. Additionally, considering that the reasons of firm exit can be divided into bankruptcy and M&A (Mergers and Acquisitions), the different effects of origins from other firms and strategic alliance for firm survival are confirmed. The results suggest that prior experience, platform-based and constant government R&D funding contribute to the sustainable development of SMEs in the biotechnology industry.

Suggested Citation

  • Kwangsoo Shin & Gunno Park & Jae Young Choi & Minkyung Choy, 2017. "Factors Affecting the Survival of SMEs: A Study of Biotechnology Firms in South Korea," Sustainability, MDPI, vol. 9(1), pages 1-18, January.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:1:p:108-:d:87752
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    2. Ma del Pilar Muñoz Dueñas & Antonio Vaamonde Liste & Maria do Rosário Cabrita, 2020. "The Survival of Cultural Firms: A Study of Multiple Accounting Parameters in Spain," Sustainability, MDPI, vol. 12(3), pages 1-14, February.
    3. Changhyeon Song & Kwangsoo Shin, 2019. "Business Model Design for Latecomers in Biopharmaceutical Industry: The Case of Korean Firms," Sustainability, MDPI, vol. 11(18), pages 1-15, September.
    4. Jugend, Daniel & Fiorini, Paula De Camargo & Armellini, Fabiano & Ferrari, Aline Gabriela, 2020. "Public support for innovation: A systematic review of the literature and implications for open innovation," Technological Forecasting and Social Change, Elsevier, vol. 156(C).
    5. Asghar Afshar Jahanshahi & Alexander Brem, 2017. "Sustainability in SMEs: Top Management Teams Behavioral Integration as Source of Innovativeness," Sustainability, MDPI, vol. 9(10), pages 1-16, October.

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